Music, Druidry, and Iconoclasm

Social Security: Much Ado About Nothing

I started out this afternoon with a simple question: how many Social Security beneficiaries are retirees?

The right wing has had its underwear tied up in knots over our “nanny state” for quite some time, and it occurred to me to try to figure out just who is being “nannied.” Not me, for sure — I still have to work for my beer. But presumably there is this huge class of undeserving lazy bums who are being treated to a lavish lifestyle at taxpayer expense: other than Congresscritters and the well-connected rich, I mean.

I wanted to know just how much of my taxes these bloodsucking leeches (not the Congresscritters, etc.) are draining away from the common good.

Some puzzling things cropped up.

First, I went to the Social Security site to find out how they’re spending my money, and I can’t find a category for “bon-bon eating, Lexus-driving, unwed welfare mothers.” Here’s what I did find:

Old Age, Survivors, and Disability Insurance (OASDI)

Supplemental Security Income (SSI)

Medicare

Medicaid

Unemployment Insurance

Workers’ Compensation

Temporary Disability Insurance

Black Lung Benefits

Veterans’ Benefits

I dug into some of these briefly, and I still couldn’t find the bon-bons. I assumed they are hidden in the fine print. So my next step was to produce the following chart:

I simply dug out my OpenSource version of Excel and plugged in the numbers from the Social Security summaries for 2009. I won’t say they made it easy. For instance, here is the OASDI information:

At first glance, this looks like $1.3 trillion. But if you stare at it long enough — in context with other entries where they did the same thing — you realize that the first item is a total, and the second two (which add up to the the first) are subtotals. They only spent $675 billion on OASDI, not $1.3 trillion.

Accountants who produce these reports are doofuses, and should be spanked.

The veterans’ benefits were particularly opaque, since they refuse to tell you anywhere how much they actually spent on veterans. Instead, all you get are average monthly benefits in certain categories, and then total numbers of recipients in completely different categories. I expected serious cover-up and hanky-panky, so I took the worst possible case: the total number of veterans paid (about 3.3 million) times the average monthly amount ($2673) for 100% disability, which should be WAY more than was actually paid out. Even with this grotesque overestimate, it still amounts to diddly.

The Big Three expenditures are OASDI, Medicare, and Medicaid — they account for well over 85% of what Social Security pays out (remember, I inflated veterans’ benefits because the doofus accountants left out the totals.)

OASDI is the retirement benefit — Old Age, Survivors, and Disability. These are all people who have put money into the system for decades. It isn’t available to illegal aliens, nor to the indigent, nor to welfare mothers eating bon-bons.

Medicare is generally available only to people who qualify for OASDI. No illegal aliens, indigents, or bon-bon eaters there, either.

Medicaid is intended to cover medical expenses for the poor. I only skimmed through the summary, but it looks pretty spartan, and it’s not easy to qualify. I also see a lot of signs in private-practice physicians’ offices indicating that they don’t accept Medicaid, so it seems like treatment options are limited. This might cover the bon-bon removal if you were to choke on one. It wouldn’t help at all with the Lexus.

As a side note, I suppose we could shoot sick people who can’t pay for medical care, and save a whopping 17% of the Social Security budget. That’s a different discussion for a different day. I’m still hunting for the bon-bon eaters.

I don’t think the bon-bon eaters are covered under Veterans’ Benefits, Workers’ Compensation, Federal Unemployment, or Black Lung Benefits. SSI applies only if you are over 65, or are blind or disabled, whether you eat bon-bons or not.

So that leaves the Temporary Disability Insurance, and finally, FINALLY, I find the welfare mothers! Yes, the TDI does cover pregnancy as a temporary disability: in California, Hawaii, New Jersey, and New York. Period.

Total fraction of the Social Security outlays? Three tenths of one percent. Assuming that every single TDI recipient is a bon-bon eating welfare queen.

Wow. I feel so ripped-off. Not by the welfare mothers. By the damned right wing whistle-brains who sent me on this fool’s chase.

They did the same thing with NPR a while back. If the federal budget is a fully-stocked 45-pound backpack, the entire federal contribution to NPR weighs less than a single “Inspected by #20” slip of paper in the bottom of one of the backpack pockets.

Fiscal responsibility my ass.

While on this subject, I was told by one conservative that Social Security is a Ponzi scam. I didn’t entirely understand this comment, but found a short, clarifying discussion on the Wikipedia page for Social security. The argument on that page is pretty clear.

A Ponzi scam is an investment scheme where I claim to have a wealth-creation tool — let’s say, a Magic Formula for predicting horse races — and I gather money from some credulous and well-heeled investors (some of whom may be in on the scam). I spend their initial investment on advertising: I go to a broader audience and say, “I have a Magic Formula, and it really works! Look at these famous, well-heeled investors who have already signed up!” I rope in a whole lot of new investors who think if John Moneybags can invest in this, it must be good. Now I have a huge pile of cash from the new investors, so I use it to pay out to my first (small) circle of investors, all of whom are very satisfied with their 100% return, never mind where it came from. With the money left over, I go on television and claim 100% return from my Magic Formula, and my initial investors will testify that, by golly, they did get 100% return on their investment. The money that brings in is paid out to the second circle of investors, who are also very happy with their 100% return on their investment.

Note that I have never gone anywhere near a horse racetrack; I have never once used my Magic Formula. Nor does my “investment fund” have any money in it, on the average — every time I get a new flush of investment capital, I use it to pay out the previous circle of investors and draw in a bigger circle of new investors. It’s a variant on a pyramid scam, except that no one knows it’s a pyramid scam until it crashes.

Social Security isn’t even close to a Ponzi scam. No one believes it generates wealth for its investors. It simply taxes one class of people (workers) to pay benefits to a different class of people (retirees). It’s a wealth-redistribution program. Period.

The money you contribute isn’t held in trust for you when you retire. It’s spent immediately on people who have already retired. Your retirement will come from the people still working when you retire. If they all stop working, or stop paying taxes, or the economy or the government collapses, you won’t get a dime. If managed carefully in a functioning economy, however, there is no reason for it to ever fail.

It’s simply children providing for their parents in their old age, averaged out over an entire nation. You helped pay for my Dad’s retirement. I helped pay for your Mom’s last days in the hospital. Where is the big moral crisis in this?

Yes, it sucks to be on the tail end of the Baby Boom, where I sit, because I will pay more, and receive less, than all those bastard older brothers and sisters of my friends. They suck.

I have about a billion other things to whine about, too. Want to hear about my plantar fasciitis?

It isn’t quite as bad as it seems, though — that’s what the Social Security Trust Fund is all about. Those clever fellows in charge of the fund have actually been saving away a little bit of those Boomers’ contributions rather than just paying it all out to current retirees, so that when the Boomers retire, it doesn’t ALL fall on the backs of the next generation. When the last of the Boomers drop out of the system, that trust fund should be just about empty, because that was precisely what it was for. It was just a buffer to get the Boomers through.